Medical-Device Makers See EU Rules Slowing U.S. Approvals

Allison Connolly

September 25, 2013, 2:46 PM EDT

U.S. medical-device manufacturers are looking anxiously across the Atlantic as the European Union prepares to tighten the process to approve new products, a step companies say will crimp their lifeline to funding and patients.

The EU’s overhaul is meant to close loopholes that allowed breast implants made with industrial-grade silicone to be implanted in thousands of women. Yet device makers say the new rules will delay approvals without increasing safety. The European Parliament’s Committee for Environment, Public Health and Food Safety today backed a tighter approval process for high-risk devices by experts designated by the European Medicines Agency, a spokesman said. The proposal will be the basis for negotiating with member states on final rules.

Smaller U.S. companies depend on the EU’s easier process to test their products and accumulate patient data that they may use to get approval in the U.S., the world’s most-profitable health-care market. Companies can get their devices approved in Europe years earlier than in the U.S., according to the European device-industry group Eucomed.

“The bar is set artificially high in the U.S.,” said Kevin Sidow, chief executive officer of Moximed, a Hayward, California-based company with a knee-implant system approved in Europe. “If the rest of the world begins to raise the bar of approval to the U.S. level, it will surely damage investment in innovation and patient progress will plateau.” He expects a U.S. regulatory decision on the product, called KineSpring, in 2016, which would be seven years after getting EU clearance.

‘Notified Bodies’

The drug regulator for the 28-nation EU, the European Medicines Agency, plays no role in the device industry. Instead, private reviewers known as notified bodies are hired by manufacturers to vet products and grant a so-called CE mark that allows them to be sold in the EU. Notified bodies, which are certified by member state governments, are required to assess the device for safety according to standards set out by European Commission directives.

Device makers pointed to the speedier EU system as a model to follow when the U.S. was considering overhauling its regulations last year, even as experts such as Oxford University’s Carl Heneghan said the European method resulted in EU citizens serving as “guinea pigs” for the device industry.

While Europe had been looking to overhaul its rules for some time, the scandal over the breast implants added a sense of urgency, David Hudson, a spokesman for the European Commission’s consumer policy division, said in an interview.

Industrial Gel

French manufacturer Poly Implant Prothese SA, or PIP, was liquidated in March 2010 after French authorities banned the company’s implants following complaints they were leaking industrial silicone inside patients.

The implants had been cleared by TUEV Rheinland, one of the EU’s roughly 80 notified bodies. TUEV said the Toulon, France-based manufacturer, which had been warned in advance of inspections, substituted a medically approved gel for the industrial variety when its officials were on site.

“Broadly, the system works,” Hudson said. “We haven’t had any more PIPs but there are weaknesses which we want to strengthen.”

The European Commission said separately yesterday it backs unannounced factory visits and sample testing at manufacturer sites and monitoring of notified bodies by member states. An audit by the commission and member states reviewed 11 notified bodies and two have been suspended from issuing CE marks until problems are addressed, according to the statement.

‘Kafkaesque’ System

Eucomed, the industry association, called the proposal approved by the parliament committee today “Kafkaesque” because it will require 600 clinical experts sitting on more than 20 subcommittees to review devices. Eucomed said previously that switching to a more centralized system would cost small- to mid-sized manufacturers an additional 17.5 million euros ($23.6 million) to get a device approved over a five-year period, based on a survey of its members.

“Bureaucracy will not prevent an alleged fraud like PIP,” Serge Bernasconi, chief executive of Eucomed, said today in the statement.

Smaller companies would be hardest hit by any cost increases, Eucomed said. Often their success in Europe is the basis for attracting investors, said Andrew Elder, a partner with London-based investment firm Albion Ventures LLP.

Marketing Viability

“Acquiring companies are looking for commercial traction as proof of the product being validated,” he said in an interview.

Even with changes, Europe will probably remain the first point of entry for many medical-device makers because the approval process in the U.S., where it’s handled by the Food and Drug Administration, is becoming more stringent and less predictable, said Jeffrey Gibbs, an attorney with Hyman, Phelps & McNamara PC in Washington and a former associate chief counsel at the FDA.

About 25 percent of devices submitted for approval every year are rejected by the FDA or the application is withdrawn, Gibbs said. “You can meet the standards in Europe and not meet the FDA’s regulatory standard,” he said in an interview.

Abbott Laboratories’ MitraClip, a clamp for leaky heart valves, has been on the market in Europe for five years yet the FDA is still weighing whether to approve it. An advisory panel recommended in March that the company provide more data on the device before the agency decides on approval. The panel voted unanimously that the product is safe and voted 5-3 that the benefits of the device outweigh the risks.

U.S. Review

Abbott hopes the device will be approved based on its experience in Europe as well as data from a U.S. trial called Everest II, said Steve Kelly, a spokesman for the Abbott Park, Illinois-based company.

Like many device companies backed by venture-capital firms, Moximed is looking to raise money and Sidow will be using his experience in Europe to make his case with investors, he said.

It’s getting tougher for companies like Moximed, as venture-capital funding for medical devices is at a more than 10-year low, Iain Scott, a life sciences analyst at EY, said in an interview. A report by Scott’s team this week cited “unease” in Europe as the reason investors are staying away.

“They don’t see an easy ride any more,” he said. “They’re now worried there will be two FDAs, one in the U.S. and one in Europe.”

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